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Tax WhizTax highlights from your advisers

KPMG in Malaysia

18 June 2020

GST Refund

“Pay first and audit later”

© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 1

Tax Whiz 2020 | GST Refund

Goods and Services Tax (“GST”) Refund

On 16 June 2020, the Royal Malaysian Customs Department (“RMCD”) has issued an announcement with regards to the GST refund on its official website for Sales Tax and Service Tax (“MySST”). A list of Frequently Asked Questions (FAQs) is also available in the MySST. Please note that both the announcement and the FAQs are currently available in Bahasa Malaysia only.

At present, the RMCD is expected to conduct GST audit on businesses expecting a refund. As an initiative to expedite the GST refund process to ease the cash flow burden of businesses, the “pay first and audit later” approach will be adopted.

Set out below is a summary of the announcement and the FAQs:-

For GST refund involving amounts below RM100,000, GST will be refunded in full after a verification process (desk review by the RMCD)Note 1.

For GST refund involving amounts of RM100,000 and above, there will be a risk rating by the RMCD.

In cases where:

i. The taxpayer has passed the risk rating process, GST will be refunded in full after a verification process (desk review by the RMCD)Note 1.

ii. The taxpayer did not pass the risk rating process, 90% of the GST refundable amount as at 1 January 2019 will be refunded after a verification process (desk review by the RMCD). The balance would be refunded after the completion of field audit by the RMCD.

Please see next page for an alternative.

Note 1: Verification, audit or investigation can still be conducted by the RMCD within 6 years from 1 September 2018.

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Tax Whiz 2020 | GST Refund

Alternatively, the taxpayer may issue the following in order to obtain the full refund:

• A bank guarantee of 10% of the GST refundable amount as at 1 January 2019; and

• An undertaking letter from the director of the company with confirmation on the accuracy of the information furnished, and assurance on the payment of potential shortfall (both tax and penalty).

The bank guarantee would be released after the completion of the field audit with no findings of underpayment of taxes.

Taxpayer should access to the Taxpayer Access Point (“TAP”) for status of the refund.

For further details, please click here for a copy of the announcement and here for a copy of the FAQs at the RMCD’s official website.

© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 3© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 3

Tai Lai KokExecutive Director –Head of Tax and Head of Corporate Taxltai1@kpmg.com.my+603 7721 7020

Long Yen PingExecutive Director –Head of Global Mobility Servicesyenpinglong@kpmg.com.my+603 7721 7018

Ng Sue LynnExecutive Director – Head of Indirect Taxsuelynnng@kpmg.com.my+603 7721 7271

Soh Lian SengExecutive Director –Head of Tax Risk Managementlsoh@kpmg.com.my+603 7721 7019

Bob KeeExecutive Director – Head of Transfer Pricingbkee@kpmg.com.my+603 7721 7029

Kuching & Miri OfficesRegina LauExecutive Director – Kuching Taxreglau@kpmg.com.my+6082 268 308 (ext. 2188)

Penang OfficeEvelyn Lee Executive Director – Penang Taxevewflee@kpmg.com.my+604 238 2288 (ext. 312)

Kota Kinabalu OfficeTitus TseuExecutive Director – Kota Kinabalu Taxtitustseu@kpmg.com.my+6088 363 020 (ext. 2822)

Johor Bahru OfficeNg Fie LihExecutive Director – Johor Bahru Taxflng@kpmg.com.my+607 266 2213 (ext. 2514)

Petaling Jaya Office

Outstation Offices

Nicholas CristExecutive Director – Corporate Taxnicholascrist@kpmg.com.my+ 603 7721 7022

Dato’ Leanne KohExecutive Director – Corporate Taxleannekoh@kpmg.com.my+603 7721 7026

Neoh Beng GuanExecutive Director – Corporate Taxbneoh@kpmg.com.my+ 603 7721 7025

Ong Guan HengExecutive Director – Corporate Tax guanhengong@kpmg.com.my+ 603 7721 7027

Chang Mei SeenExecutive Director – Transfer Pricingmeiseenchang@kpmg.com.my+ 603 7721 7028

Ivan Goh Executive Director – Transfer Pricingivangoh@kpmg.com.my+ 603 7721 7012

Contact us

Ipoh OfficeCrystal Chuah Yoke ChinTax Manager – Ipoh Taxycchuah@kpmg.com.my+605 253 1188 (ext. 320)

© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 4© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 4

Tax Whiz 2020 | Report Name

© 2020 KPMG Tax Services Sdn. Bhd., a company incorporated under Malaysian law and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

The KPMG name and logo are registered trademarks or trademarks of KPMG International.

Petaling Jaya

Level 10, KPMG Tower, 8, First Avenue, Bandar Utama, 47800 Petaling Jaya, SelangorTel: +603 7721 3388Fax: +603 7721 3399Email: info@kpmg.com.my

Penang

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Kuching

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Kota Kinabalu

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Johor Bahru

Level 3, CIMB Leadership Academy, No. 3, Jalan Medini Utara 1, Medini Iskandar, 79200 Iskandar Puteri, JohorTel: +607 266 2213Fax: +607 266 2214Email: info@kpmg.com.my

Ipoh

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Miri

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